Student Test Scores Rose When Teachers Retired Early

Student test scores rise when experienced teachers are enticed to leave, according to new research.

In a working paper published by the National Bureau of Economic Research, Cornell University researchers Maria D. Fitzpatrick and Michael F. Lovenheim used an early retirement incentive (ERI) program implemented in Illinois during the mid-1990s to assess the impact of teacher experience on student test scores.

Josh Anderson for The Wall Stree

In the Illinois program, teachers aged 50 or older, with at least five years of service, received extra retirement benefits — equivalent to five years of service — for retiring immediately. The researchers estimate that about 10% of teachers in the Illinois public school system left over a two-year period as a result of the plan. The median age of retirement went from 60 with 32 years of teaching service to 55 with 27 years, and the retirees were typically substituted with younger, more novice teachers who were also cheaper to employ. The researchers calculate that replacing a 27-year veteran teacher with a beginner saved a school district an average of $20,772 per year in salary payments.

To measure student achievement, the researchers examined math and English standardized test scores of third, sixth and eighth grade students from 1989 to 1997 — before and after the program’s implementation. They found that school districts with more retirees had higher test scores. The results were unexpected, as previous literature has shown that teacher experience correlates with student achievement.

“Although we show that the ERI program led to a large amount of retirement by experienced teachers, which consequently lowered teacher experience levels, we find the program did not reduce test scores and instead led to increased student achievement in most cases,” the researchers write.

Why did student test scores increase in districts where more novice teachers replaced veterans? The researchers offer a number of potential reasons. Among veteran teachers, perhaps those with the poorest track record were most responsive to early retirement incentives, or maybe older teachers were not as well-versed in the latest, most effective teaching practices. Another explanation is that experienced teachers put in less effort as they approach retirement. “They might not invest as much because they want to retire.” says Mr. Lovenheim. “So when they get closer to retirement, they check out.”

The findings support early retirement incentive programs as a way for school districts to obtain higher outcomes, while utilizing a cheaper workforce. However, in Illinois, the savings from employing younger teachers didn’t offset the extra money spent on the retirement benefits. The program ended up costing taxpayers in the state about $92 million, according to the researchers. “They made the program too generous,” says Mr. Lovenheim. “It should be implemented in a way that doesn’t cost taxpayers.”

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